Between 2005 and 2009, general poverty declined in Nicaragua, driven by welfare improvements in rural areas. At the same time, inequality fell across the board. Still, one in three rural Nicaraguans lives in extreme poverty. A preliminary analysis suggests... Vea más +Between 2005 and 2009, general poverty declined in Nicaragua, driven by welfare improvements in rural areas. At the same time, inequality fell across the board. Still, one in three rural Nicaraguans lives in extreme poverty. A preliminary analysis suggests that muted economic growth, weak labor market dynamism and low coverage of social programs cannot explain the results. Instead, external shocks such as the global economic crisis likely had a bigger role in shifting employment and income opportunities, while the food crisis seems to be explaining part of the rural gains through improvements of farm incomes and deterioration of urban household welfare. A more in-depth analysis of poverty and inequality in Nicaragua from 2005 and 2009 is urgently needed by expanding this work to uncover the determinants of the poverty and inequality changes, the constraints that the poor still face to escape poverty, the vulnerability to external shocks and the role of social programs in overall poverty reduction.
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